DirecTV Fights For $54, Launches Satellite Broadband & TV Bundles

While DirecTV (NASDAQ:DTV) has enjoyed pay-TV subscribers gains in a competitive and saturated U.S. pay-TV market in the past few years, its rival Dish Network (NASDAQ:DISH) has been inconsistent and cable providers such as Comcast (NASDAQ:CMCSA) and Time Warner Cable (NYSE:TWC) have continually lost subscribers. Competition has become more fierce now as Dish Network even surpassed DirecTV in terms of net pay-TV subscriber additions in Q1 2012. DirecTV is not enjoying a smooth ride anymore and in order to find new avenues for growth it is targeting customers in remote and rural areas with new bundled offerings.

Under the agreement, the company will be able to bundle its pay-TV offering with satellite broadband, thereby targeting customers who do come under the landline coverage of cable companies and telcos. This announcement follows a similar move by Dish Network when it partnered with ViaSat earlier this year to launch bundled pay-TV and broadband offering in rural areas (see Dish Network Updates: Open To Acquisition, Launching Broadband). The potential market to tap is about 8 million to 10 million households.

In order to fight the risk of losing subscribers to attractively priced bundles, DirecTV has formed several partnerships with companies such as AT&T (NYSE:T), Verizon (NYSE:VZ), Centurlink and now Viasat and Hughes. DirecTV is going to battle against Dish on the latter’s turf, as Dish has been relatively more attractive to rural customers with its more competitive pricing.

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